Friday, September 20, 2013

FMC Examining New China Transport Tax

The Federal Maritime Commission says it’s looking into the potential impact on US waterborne cargo of new regulations by China regarding a nationwide value-added tax on international transportation services.

Under the tax revamp, companies pay on the value added during the business process; the previous business tax was set at five percent of a company’s total sales. Some businesses say the change has resulted in an increase in their tax burden.

China implemented the new tax on Aug. 1, 2013.

The Commission says its action is a response to a number of maritime industry stakeholders expressing concerns regarding the application of the tax. The FMC says it has received requests for assistance from the shipping community to clarify the tax’s application and scope and that its staff is gathering information on the tax through cooperative efforts with other US federal agencies, the US Embassy and various US Consulates in China.

Information is also being gathered from the private sector, including carriers and non-vessel-operating common carriers, according to the FMC.

In a Sept. 18 statement, the Commission said that after conducting a closed meeting on the issue, it’s concerned that there may be negative impacts on oceanborne international commerce between the United States and China.

The FMC says that ocean carriers and NVOCCs it regulates appear to be collecting the new tax, and that it’s considering a range of options to obtain further clarity on the new tax’s application.